Instead of getting the message that was loudly and clearly stated to them today, my guess is that rather than fully informing investors, and putting together a cohesive plan for moving forward, engaging a strategic analysis, etc., they will focus all their time and efforts on twisting arms to get more "yes" votes.
What they should do is come to the investors and say, "OK, we got the message, and here's what we plan to do differently . . ."
But they won't do that, their probably already putting their heads together to see how and where they can turn the vote to their favor.
Just a guess. . .
I don't agree with everything here, I'm one of the few supporters on yahoo anyway of Management, what they have been piecing together, though slowly, is becoming a gem, none of which would be possible as JT mentioned in today's meeting, without Ceplene in this economic environment, it's amazing they survived, little lone have a chance of breaking out into profitability. The dillutions hurt stock price, no question about it. And I'm not saying that I totally agree with what I'm about to write, but it doesn't seem to me that anyone else has considered the flip side. Epicept has no means to generate capital for operations, there are several bad scenarios here:
1. It could force them to make a deal on the fly (what everyone seems to want vs. potentially hanging on for the best deal).
2. They may issue debt at extremely high interest rates to keep operations intact, and I guarantee those terms would not be favorable to the shareholders.
I see everyones point here too, there are a lot of things to consider, we are in a little bit of a grey area. Bottom line though is, I don't think JT, Savage, or anyone else is going to trade millions of dollars of gains, for a few grants, and a salary increase. But what do I know, just my point of view, I'm happy with the insider ownership, and that they are holding, it sort of paints the opposite picture of things they are accused of....depending on one's view is, I suppose the truth is somewhere in the middle, but some of these vents in here are pretty outrageous, though entertaining. That is all, thank you.
You essentially point out that cutting off the issuance of new shares could have the effect of forcing them to accept a bad deal and/or financing. This is a valid concern, let me address it:
1 - The partnering clock should have started at least preliminarily last July, that's one year. If the drug is as safe and efficacious and as badly needed as they say AND there is a need for new products by pharma AND its a small market THEN any competent management team should have concluded a favorable agreement on favorable terms.
So, evidently, there is some problem that they are not disclosing. Either the drug is what its purported to be, or they are poor negotiators, or they are not respected, or they are unreasonable in their expectation, or their crappy personalities just turn people off. Whatever it is, there is some problem(s).
And here is the key: FURTHER DILUTION WILL NOT SOLVE ANY OF THOSE PROBLEMS.
In fact, dilution will only worsen the problem by delaying the inevitable.
2 - Let's assume they are forced to accept a less than perfect deal. Could those terms result in any worse effect on shareholders than 50+% dilution?
Bear in mind the deal is only for AML in the EU, there still remains the US and ROW for AML and subsequent indications as well, so I don't see how a few percentage point differences in royalties on this FIRST deal would kill us.
3 - In the event that they have to take on debt: Trust me, if you have a solid product with verifiable and quantifiable revenue projections, you can obtain funding, and the terms, will be acceptable.
4 - Whether they go the debt or partner route and are forced to accept in either case, less than ideal terms, you have to ask yourself: can those terms be so bad as to offset the minimum one year's revenue that will have been lost by that time? Again, we are only talking about that first deal and that first deal should have been wrapped up and moved on. Consider the value of lost time.
In the end: am I more comfortable with a) a less than perfect deal vs b) giving these guys carte blanche in the form of millions of new shares?
I choose B mostly because good leadership could have avoided this situation to begin with and throwing more shares at the problem only makes things worse.
1 - The apparent outstanding shares are already 118 million. I was surprised to know it was this high.
2 - The total current authorized shares are 175 million, so they have some to issue if need be (and you can bet now that they will). As an aside, Talley described that quantity as a "limited number" I think it was he said.
3 - In reality, they sought to double to 100 million the authorized shares, or a 100% total maximum dilution if all were to be issued.
So, yeah, we made the right decision and voted appropriately!
They just got in Stockholm a first cold shower lesson. Let them believe their next meeting in Tarrytown could change that outcome in a homerun. Chairman Bob Savage entertained the SH meeting as tricky talker and not as person who builds stockholder confidence. He may look now for their new self-service rules to undermine the stockholder votes. If so, he will get his next lesson that they aren’t that smart to deceive stockholders. Let them at first come with their new proposal.
The Hellstrand presentation gave some interesting insight in Ceplene’s action and into possible medical extensions. Talley behaved this time in a more positive neutral manner.
My general impressions:
1 - I have a newfound respect for the toughness of the Swedes, nice work by the folks over there. I suppose if you can take on Peter the Great, you can handle these bozos, and you did.
2 - Dr. Hellstrand is very impressive. He may regret that his life's work is in the hands of EPCT, but hopefully, he will eventually obtain his just reward.
3 - Savage is a joke. He puts no thought into his words and much of what he had to say was trite and meaningless pablum and comes across completely untrustworthy. His lame attempts at humor were embarrassingly lame, but I was most appalled that he would make comments about US politics while a guest in a foreign country. Highly inappropriate and unprofessional and without class whatsoever.
4 - Talley, on the other hand, is well spoken and articulate, quite on the opposite end of the spectrum from Savage. However, he chooses his words too cautiously and his responses are almost like a politician 'say a lot, but mean nothing.' Overall he doesn't present himself as warm or inspiring or trustworthy either.
5 - Overall, when the two top leaders come across as either too calculating (Talley), or too trite (Savage), the impression is that their true motives and goals and knowledge are not being divulged.
merely my impressions . . .